Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted tax bases: Inventory Building Land Total FMV $ 33,500 54,000 198,000 $ 285,500 Requiredi Adjusted Tax Basis $ 9,300 30,250 87,000 $ 126,550 The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted tax bases: Inventory Building Land Total FMV $ 33,500 54,000 198,000 $ 285,500 Requiredi Adjusted Tax Basis $ 9,300 30,250 87,000 $ 126,550 The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the corporation by Ramon. Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject : Accounting
Transcribed Image Text:Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the corporation in return for 100 percent
of the corporation's stock. The property transferred to the corporation had the following fair market values and adjusted tax bases:
Inventory
Building
Land
Total
FMV
$ 33,500
54,000
198,000
$ 285,500
Adjusted Tax
Basis
$ 9,300
30,250
87,000
$ 126,550
The fair market value of the corporation's stock received in the exchange equaled the fair market value of the assets transferred to the
corporation by Ramon.
Note: Leave no answer blank. Enter zero if applicable. Negative amount should be indicated by a minus sign.
Required:
a. What amount of gain or loss does Ramon realize on the transfer of the property to his corporation?
b. What amount of gain or loss does Ramon recognize on the transfer of the property to his corporation?
c. What is Ramon's basis in the stock received in the new corporation?
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